CAI-NJ Feb. 2019

The Role of a RENT RECEIVER By Esmeralda Lopez Rent Receiver

H ave you ever seen a ham- ster in its runner’s wheel? No matter how fast and hard it works towards an exit, the hamster is still

© iStockphoto.com

inevitably in the same spot. Unfortunately, with delinquen- cies, a homeowners association (‘HOA’) can find itself in a very similar predicament. The HOA entrusts to its board of directors, the very important task, among other things, to keep the delinquency rate for their association low and manageable. This is where a court appointed rent receiver may become an asset to your community. With the consistent backlog in New Jersey of foreclosure proceedings and the lengthy process it takes to finally exe- cute a sheriff sale, a rent receiver can become a communi- ty’s closest ally. N.J.S.A. 2A:17-66, affords an association the right to have a court appointed rent receiver place a tenant in a vacant delinquent unit. The rent receiver will then collect rents, which can be used to lower the arrears of delinquent unit and/or to keep the association’s monthly fees current. If your board members find themselves wondering, what is the role of this rent receiver? How does our association

g e t one? And, what are they doing with the money? Let’s unpackage these very important questions below: 1. What is the role of this rent receiver? A rent receiver is appointed by the court to act as a land- lord for the unit in question. The rent receiver is responsible to find a tenant, maintain and collect rent for the unit, typi- cally for a definitive period of time or until the unit has com- pleted a sheriff sale. Through the waiting process, a rent receiver should maintain meticulous accounting records of the rents received, repairs made, fees paid to the associa- tion and fees paid to themselves. It is important to note, that in this role, a rent receiver is not a managing agent for the association, but rather a professional third-party, appointed by the court. The rent receiver must answer directly to the courts concerning this unit. That being said, transparency

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